Ideas and strategies for a sustainable world

Smart Grid and ARRA Money

For those I haven’t talked to recently, I’m in the process of shifting my career towards government policy and regulation, targeting areas that are relevant to climate change and energy. (See my last post Ultimate Vision)

With my tech and business background in Internet, the most natural fit seems to be smart grid policy. So, here are my notes from last Friday’s “workshop” at the California Public Utilities Commission (CPUC) where the topic was how companies in California can get smart grid related funds from the Recovery Act (aka Obama’s stimulus package). The specific goal was for these companies to inform the PUC on what they think the PUC could do to help them get this money.

To set the stage, PUC Commissioner Rachelle Chong reviewed the Act and the relevant timelines. Two important dates: The DOE is due to release details about the requirements for getting funding by April 17th. And the funds from the Act need to be obligated by Sep 30th, 2010. Also, most of the funding would be in the form of matching funds, where the companies would need to come up with half the cost of any proposed project.
In my mind, the themes for the day were

We don’t know the criteria that the DOE is going to set for these funds, but

The DOE is in a hurry to allocate this money (in govt time, 1.5 years is fast), so

We need to prepare “shovel ready” project proposals to compete with other states right now based on what we think the DOE is going to want to see

During the 2.5-hour workshop, we heard from each of the major Investor Owned Utilities (IOU) as well as several publicly owned utilities, the California ISO, a few technology companies, and a few groups representing ratepayers (i.e. electricity consumers).

Based on the first bullet above, it felt like maybe this event was a little early, as if it was difficult for any of these groups to really describe what they wanted to do when they were shooting at an uncertain target. But, as Jake Wise, my Presidio classmate and a PUC analyst, said, things move slowly enough that it was valuable to get the ball rolling and everyone at least talking about moving together.

Also, two of the commissioners are planning to go to DC on 3/31, gather as much information as they can and represent California as a united front in competing for these dollars. So, this workshop was also asking for input they could take to DC.

Without detailing all the projects and technologies that were described, the major takeaways I heard:

CA utilities are national leaders in Smart Grid, are dedicated to rapid development and deployment and already have demo projects planned that could qualify for Recovery Act money

All the necessary technologies exist already. They just need standards to be set for interoperability and those standards should not just be developed by a bunch of engineers in a room. The standards should be worked out through demo setups and field tests

Projects need to look “shovel ready” so make sure that PUC approval process is expedited and synched with the DOE approval process. There’s a real risk that the historical PUC slowness will be perceived as a barrier to deploying the money quickly. To that end, consider applying for Recovery money for *already approved* projects

Ratepayer concerns and job creation are important but none of the companies directly addressed these topics in the workshop.

Based on this input, the main recommendations directly for the PUC seemed to be:

Continue to act as the convener. The PUC seems to be the right place to hold the combined vision, coordinate amongst the players, and present a unified face to the DOE

Dedicate staff specifically to the Recovery Act

Create a unified definition and vision of Smart Grid for California and maintain a publicly accessible inventory of Smart Grid projects in the state

Help ensure that the ratepayers see some benefits of these funds, not just the market participants

Personally, I feel that we were missing concrete ideas on job creation, one of the Recovery Act’s major priorities. The Smart Grid projects and technologies would mean additional business for these companies but the number of jobs created, especially for blue-collar workers, seems minimal.

So, my thought for the commissioners is to go to the DOE and float the idea of job creation by increasing support for distributed generation. The basic thinking is that large scale distributed generation will require Smart Grid advances in protocols, control systems, interface standards and rate structures. This piece of the Smart Grid could be developed in parallel with the rest of the pieces and so could be funded in distinct, well-defined chunks.

If the grid supports easy, cost effective installation of distributed generation that requires less specialized training (and fewer truck rolls by the utilities), California would see a big jump in demand for installers and related green collar jobs. This would, in my opinion, be the quickest way to create a large number of jobs that blue-collar workers could qualify for.

If the commissioners find that this logic plays well at the DOE, then we could influence the criteria that are published in April and encourage the California utilities to develop projects on this specific area.